Stocks of the Week!

In this email:

• Bagging Bucks with Bezos💰👨‍🦲

• Bet Big on Baba - Cash or Crash? 💥

Bagging Bucks with Bezos💰👨‍🦲

This isn’t revolutionary.

But sometimes the most obvious things get overlooked & I wanted to bring it to your attention⚡

I’m talking about Amazon stock.

It’s up over 70% in the past year & after doing a little digging I think it’s still got a long way to go… I’m talking 30%+

Here’s why…

Over the last few years, Amazon’s been pouring cash into expanding their empire. They’ve been doing everything from beefing up logistics to going on a hiring spree. Now, CEO Andy Jassy is flipping the switch to ramp up cash flows and pump profitability. 💸

It’s bit like going on a bulking season at the gym & then a hardcore cut to see all the gains left underneath 💪

First up, Amazon is increasing fees for third-party sellers. No doubt some sellers will complain but where else are they going to go? 🤨

Amazon fulfillment & the access to customers is too valuable for sellers to wave goodbye and Amazon knows that. That’s why they want a bigger cut of that pie. As an investor it means we’ll see those retail margins climbing. 📊

Their ad game is growing & thriving too. The sheer volume of data they receive from ready-to-buy customers makes their ad business hyper effective.

Hyper effective = fat margins = juicy profits 💰

And that’s what we’re seeing

This ad talk takes us nicely onto another cash cow that’s about to get beefier…. Amazon Prime

They’ve run it at a loss to build a massive subscriber base, and now they're planning to drop ads on all these Prime viewers. 🍿 

Because the Prime subscription is so much more than just a streaming service a few more ads is very unlikely to increase the cancellation rate.

I mean, would you cancel your next day delivery luxuries just because your favourite series has a few ads in it now? I know I won’t be.

But one thing’s for sure - it’ll definitely put a bunch more money onto the bottom line 🤑

“Wow that’s really impressive” you’re thinking “That must be everything, right?”

Wrong! ❌

There’s their web service AWS that’s becoming the backbone of the internet. As the AI wave keeps rolling, AWS is set to scale even higher. 🌐

And they’re even setting themselves up to enter the healthcare game.

Imagine skipping the lines at your doctors or chemists & having Amazon deliver your meds straight to your door through Prime 💊📦

That has the potential to generate some monstrous revenues.

So to summarise…

They're the top dog in online retail, cloud hosting, and a growing force in ads, streaming, and AI. Now they’re eyeing healthcare too.

I’m just shy of 6% of the portfolio into Amazon but will be looking to up that number.

Amazon pullbacks are going to be shopping days for me from now on.

Bet Big on BABA? 🤔

I’ve been bullish on Alibaba for a while.

And a whole bunch of other Asian stocks that you can see on my etoro profile.

That’s actually paid off - Asia is our most profitable region to trade and I think we’re only just getting started 🙌

Let me tell you why.

The Chinese economy is on a bit of an uptick📈

Steady GDP growth, government stimulus packages, consumer spending is back on the rise, inflation coming under control & the tech sector growing even with some government intervention here & there.

Now who would be set to benefit from increased consuming spending & a thriving tech sector?

You guessed it - the Amazon of China! Alibaba!

BABA report earnings this Tuesday⏰ 

Just like Amazon, Alibaba isn't just sitting back & taking it easy; they’re ramping up investments It takes money to make money & they're pumping it into user experience & overseas markets right now.

Analysts are expecting this to show in their report by penciling them in for higher revenue numbers but lower net profit.

That might not sound good on the surface but it’s actually a great thing if you’re a long term investor in a stock like Alibaba.

They’re setting themselves up for long term success over short term gains by putting the infrastructure in place to benefit from a growing marketplace in Asia & expanding into the global economy 🌎

There's also rumblings of a bump in dividends so that'll be exciting if it comes through 💰

Alibaba's stock price in general has been pretty flat & range bound bouncing between $70 -$80 for a little while now 🏓 

If the earnings reports meet expectations & the Chinese economy keeps going the way it is I don’t think a 50% gain would be out of this world in the coming months 🚀

That’s all! See you same time next week 👋 

P.S Hit reply & let me know what you thought of this weeks newsletter. All feedback is welcomed ❤️